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Motilal Oswal Financial Services
BSE: 532892 | NSE: MOTILALOFS | ISIN: INE338I01027 | Finance - General
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Mar '08 |
The Directors have pleasure in presenting their 3rd Report together
with the audited Accounts of your Company for the year ended 31st
March, 2008.
Financial Highlights
Summary of Financial results for the year is as under: -
Motilal Oswal Financial Services Limited (Standalone)
Rs.in million
Year ended Year ended
31st March, 31st March,
2008 2007
Income 355.76 109.78
Profit before Interest, Exceptional Items,
Prior period expenses and Taxation 290.30 87.58
Interest (44.62) (2.00)
Exceptional Items - (42.64)
Prior period expenses - (5.37)
Profit before Taxation 245.68 37.57
Provision for Taxation
Current Tax (71.69) (27.66)
Deferred Tax Asset/(Liability) (0.42) (0.33)
Fringe Benefit Tax (0.67) (0.07)
Profit for the year 172.90 9.51
Balance brought forward from previous year 5.73 (1.88)
Profit Available for appropriation 178.63 7.63
Less: Appropriations
Transfer to Statutory Reserve & Capital
Redemption Reserve 34.58 1.90
Proposed dividend 113.62
Transfer to General Reserve 13.83
Balance of Profit carried forward 16.60 5.73
Summary of Consolidated Financial results of the Company and its
subsidiaries for the year is as under: -
Rs.in million
31st March, 31st March,
2008 2007
Income 7,009.04 3,675.75
Profit before Interest, Depreciation and
Taxation 2,695.88 1,367.45
Interest (149.03) (39.38)
Depreciation (148.47) (109.98)
Profit before Taxation and Exceptional Items 2,398.39 1,218.09
Exceptional Items - (42.64)
Prior year expenses - (11.36)
Profit before Taxation 2,398.39 1,164.09
Provision for Taxation
Current Tax (772.11) (398.94)
Deferred Tax Asset/(Liability) 1.49 (1.96)
Fringe Benefit Tax (12.43) (8.72)
Wealth Tax (0.19) (0.19]
Tax for the prior year (4.77) (0.64)
Profit after Taxation before Extraordinary
Items for the year 1,610.38 753.64
Rs.in million
31st March, 31st March,
2008 2007
Extraordinary Items (net of tax) 145.36 (41.97)
Profit after tax before Minority Interest 1,755.74 711.67
Minority Interest in profits (49.53) (27.20)
Profit after tax and Minority Interest 1,706.21 684.47
Profit brought forward from previous year 784.71 126.39
Profit available for the Appropriations 2,490.92 810.86
Less:- Appropriations
Transfer to Statutory Reserve & Capital
Redemption Reserve 124.58 1.90
Pre acquisition (profits)/Loss 10.20 24.25
Proposed Dividend 265.12
Distribution tax on proposed Dividend 25.75
Transfer to Genera) Reserve 30.59
Balance of Profit carried to Balance Sheet 2,045.08 784.71
Dividend
Keeping in view the overall performance during the year, your Directors
are pleased to recommend a maiden dividend of Rs.4 per Equity Share on
the face value of Rs.5 each being 80% dividend, payable to those
members whose names appear in the Register of Members as on the Book
Closure Date. The Dividend will absorb a sum of Rs.113.62 million.
Results Of Operations
The Revenue for the year increased by 224% from Rs.109.78 million to
Rs.355.76 million. The Profit before, interest, exceptional items,
prior period expenses and taxation registered a growth of 231% and were
up from Rs.87.58 million to Rs.290.30 million. The Companys net profit
for the year was Rs.172.90 million up from Rs.9.51 million in the
previous year.
The detailed results of operations of the Company are given in the
Management Discussion & Analysis forming part of this Report.
Subsidiary Companies
The subsidiary companies of your Company are moving on from strength to
strength and contributing to the overall growth of your Company. These
subsidiaries have created a niche for themselves with their excellent
performance and are continuing to add to the shareholders value.
The Consolidated Group Profit for the year after exceptional items,
prior period adjustments and tax and after deducting minority interests
is Rs.1,706.21 million as against Rs.684.47 million earned last year -
a growth of 149%.
During the year under review, Motilal Oswal Securities Limited (MOSL),
the Material Non-listed Subsidiary of the Company earned the revenues
of Rs.6,006.14 million and PAT of Rs.1,381.73 million. During the year
under review, the market share of MOSL was 4.69% as against 4.12% in
the previous financial year.
During the year under review, Motilal Oswal Capital Markets Private
Limited became the subsidiary of MOSL and, in turn of the Company.
The Statement pursuant to sect ion 212 of the Companies Act, 1956,
containing details of the Companys Subsidiaries is attached.
The Consolidated Financial Statements of your Company and its
subsidiaries prepared in accordance with Accounting Standard - 21
prescribed by The Institute of Chartered Accountants of India, form
part of the Annual Report and the Accounts.
In terms of approval granted by the Central Government under section
212(8) of the Companies Act, 1956, copy of the Balance Sheet, Profit
and Loss Account, Reports of the Board of Directors and Auditors of the
subsidiaries have not been attached with the Balance Sheet of the
Company. The Company Secretary & Compliance Officer will make these
documents available upon receipt of request from any Member of the
Company interested in obtaining the same. However, as directed by the
Central Government, the financial data of the subsidiaries have been
separately furnished forming part of the Annual Report. These documents
will also be available for inspection at the Registered Office of the
Company and the concerned subsidiary companies, during 2 p.m. to 5 p.m.
on all working days upto the date of the Annual General Meeting.
Initial Public Offer (IPO)
To augment the capital base for future growth plans, your Company made
an Initial Public Offer (IPO) of 29,82,710 Equity Shares of Rs.5 each
(the Shares) in the price band of Rs.725 - Rs.825 per share. The
issue constituted 10.50% of the paid-up share capital of the Company.
Your Directors would like to state, with great pleasure, that the issue
received an overwhelming response and was subscribed 27.18 times, in
turbulent market conditions. The issue price was fixed at Rs.825 per
Equity Share, being the upper end of the price band.
The Shares were allotted on 5th September, 2007 and got listed on
Bombay Stock Exchange Limited and National Stock Exchange of India
Limited on 11th September, 2007.
Capital
Consequent upon the Initial Public Offer, the paid-up share capital of
the Company stands at Rs.142.02 million divided into 2,84,04,000 equity
shares of Rs.5 each.
Sub-division of Equity Shares
The Directors, subject to the approval of the members, have proposed
the sub-division of existing 1 (One) Equity Share of face value of Rs.5
(Rupees Five) each, into 5 (Five) Equity Shares of the face value of
Re. 1 (Rupee€ne) each.
Credit Rating
During the year under review, CRISIL Limited assigned the highest
rating of P1+ to the Short-term Debt Programme of Rs.2 billion. The
rating indicates the highest degree of safety with regard to timely
payment of interest and principal on the instrument.
CRISIL Limited also assigned the rating of P1+ to the Short-term Debt
Programme of Rs.3 billion of Motilal Oswal Securities Limited, a
subsidiary of the Company.
Finance
During the year under review, to meet the working capital requirements,
the Company has issued Commercial Papers and Non-convertible
Debentures.
Employees Stock Option Schemes (ESOS)
Details required to be provided under the Securities and Exchange Board
of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are set out in Annexure to this Report.
Directors
Mr. Raamdeo Agrawal and Mr. Navin Agarwal retire by rotation at the
forthcoming Annual General Meeting and, being eligible, offer
themselves for re-appointment.
During the year under review, Mr. T. S. Anantharaman and Mr. Mark Rubin
resigned as Directors of the Company. Consequent upon the resignation
of Mr. Rubin, Mr. Ankit Kesarwani, an alternate Director to Mr. Rubin
also ceased to be the Director of the Company.
The Board places on record its sincere appreciation of the services
rendered by Mr. Anantharaman, Mr. Rubin and Mr. Kesarwani during their
tenure as Directors of the Company.
Directors Responsibility Statement
Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors
confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and these have been applied consistently and
reasonable and prudent judgments and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at
31st March, 2008 and of the Profit of the Company for the year ended on
that date;
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) the annual accounts have been prepared on a going concern basis.
Audit Committee
The Audit Committee presently comprises of Mr. Balkumar Agarwal
(Chairman of the Committee), Mr. Ramesh Agarwal and Mr. Raamdeo
Agrawal.
Remuneration/Compensation Committee
The Remuneration/Compensation Committee of the Board of Directors
presently comprises of Mr. Ramesh Agarwal (Chairman of the Committee),
Mr. Balkumar Agarwal and Mr. Motilal Oswal.
Shareholders/Investors Grievance Committee
The Shareholders/Investors Grievance Committee of the Board of
Directors presently comprises of Mr. Balkumar Agarwal (Chairman of the
Committee], Mr. Motilal Oswal and Mr. Raamdeo Agrawal.
Nomination Committee
The Nomination Committee of the Board of Directors presently comprises
of Mr. Motilal Oswal and Mr. Raamdeo Agrawal.
Risk Management Committee
The Risk Management Committee of the Board of Directors presently
comprises of Mr. Motilal Oswal and Mr. Navin Agarwal.
Corporate Governance
A report on the Corporate Governance along with a certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as also the Management Discussion and Analysis
Report as stipulated under Clause 49 of the Listing Agreement are
annexed to this Report.
Auditors
Messrs. Hanbhakti & Co., Chartered Accountants, retire as Auditors of
the Company at the forthcoming Annual General Meeting and have given
their consent for re-appointment. The members will be required to
appoint Auditors for the current year and fix their remuneration.
As required under the provisions of section 224 of the Companies Act,
1956, the Company has obtained a written certificate from the above
Auditors proposed to be re-appointed to the effect that their
re-appointment, if made, would be in conformity with the limits
specified in the said section.
Fixed Deposits And Loans/Advances
The Company has not accepted any deposits from the public or employees
during the year under review.
The particulars of loans/advances and investment in its own shares by
listed companies, their subsidiaries, associates, etc., required to be
disclosed in the annual accounts of the company pursuant to Clause 32
of the Listing Agreement with the Company, are furnished separately.
Conservation of Energy and Technology Absorption and Foreign Exchange
Earnings and Outgo
In view of the nature of activities which are being carried on by the
Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 concerning conservation
of energy and technology absorption respectively are not applicable to
the Company.
There was no inflow of foreign exchange during the year under review.
Details of the foreign exchange outflow are given in the notes to
Accounts.
Particulars of employees as required under section 217(2A) of the
Companies Act, 1956 and Rules framed thereunder
As required under section 217(2A) of the Companies Act, 1956 and Rules
thereunder, a statement containing particulars of the Companys
employees who were in receipt of remuneration of not less than
Rs.24,00,000 during the year ended 31st March, 2008 or of not less than
Rs.2,00,000 per month during any part thereof is given in the Annexure
to this report.
Acknowledgments
Your Directors take this opportunity to thank the Authorities, Bankers
of the Company, Shareholders and the Customers for their continued
support to the Company. The Directors also place on record their
sincere appreciation of the contributions made by every member of the
MOFSL family for their dedicated efforts that made these results
achievable.
For and on behalf of the Board
Motilal Oswal
Chairman & Managing Director
Mumbai. 26th May, 2008.
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